The Debt Management Office (DMO) on Wednesday reported that its July 2023 Federal Government of Nigeria (FGN) bond offering received overwhelming investor interest, surpassing all expectations with an oversubscription rate of 182.73 percent.

The DMO, responsible for managing the nation’s debt, reopened the market for two 10-year, one 15-year, and one 30-year FGN bonds, collectively valued at N657.84 billion.

The July 2023 offering also recorded a month-on-month increase of 39.03 percent, equivalent to N184.68 billion when compared to the N473.16 billion sold in June 2023.

This was revealed in the FMDQ Exchange financial markets monthly report for July, which was released on Wednesday.

The oversubscribed FGN bond offering in July, combined with the impressive performance in the treasury bills market, where the DMO sold bills valued at N406.10 billion, underscores Nigeria’s fiscal strength.

During the month under review, the Central Bank of Nigeria did not conduct any public OMO bills auctions within the period under review.

The average FGN bond coupon rates in July 2023 dipped across 10-year, 15-year and 30-year segments to 13.05 percent, 14.10 percent and 14.30 percent respectively.

It was also reported that there were no corporate bonds listed on FMDQ Exchange in July 2023 compared to N17.50bn worth of corporate bonds listed in June 2023.

For the Development Bank of Nigeria‘s first bond issue, Prominent development investment banking institution, DLM Capital served as both the principal issuing house and the financial consultant.

Through one of its subsidiaries DLM Advisory, the DLM Capital Group has constructed and provided advice on Nigeria’s first development bond, which was issued by the Development Bank of Nigeria.

The Series 1 ₦23 billion, 14.40% 5-Year Bond under a N100 billion Medium Term Note Programme registered with the Securities and Exchange Commission was designed to make sustainable capital available to Micro, Small, and Medium-Scale Enterprises (MSMEs). On July 13, 2023, the first batch of bonds were issued.

Dr. Tony Okpanachi, the managing director and chief executive officer of the bank, commented on the bond issuance and emphasized that DBN’s main goal as an institution is to reduce the financial constraints faced by MSMEs and small businesses in Nigeria by providing financing and partial credit guarantees to qualified financial intermediaries on a market-conforming and fully financially sustainable basis.

Mr. Nwabu Okonkwo, Vice President, Investment Banking at DLM Advisory Limited, said in a statement that the bond offering was favorably accepted by the market and attracted participation from a wide variety of investors, including domestic pension funds, asset managers, and insurance companies.

The Bank had planned to raise ₦20 billion, but overall subscriptions totaled ₦25.37 billion, or 1.26 times more than that amount. With eligible bids totaling ₦23 billion, the Series 1 Bond was offered at a clearing coupon of 14.40%.

DLM Capital Group GCEO, Mr. Babatunde Sonnie Ayere, commented on the transaction in a statement, saying, “DLM Capital Group is proud to have led this historic transaction which marks the debut bond by the Development Bank of Nigeria, reflecting the strong credit quality of the issuer as well as the resilience of the Nigerian Capital markets, despite the current global market volatility.”

With Standard Chartered Capital & Advisory Nigeria Limited serving as the Joint Issuing House, Agusto & Co., Deloitte & Touche, KPMG, Meristem Registrars & Probate Services Ltd., Zenith Bank Plc, Access Bank Plc, and First City Monument Bank are additional parties. Olaniwun Ajayi LP, G. Elias & Co., DLM Trust Company, ARM Trustees, GCR Ratings, and others are also involved.

Nigeria, with its unwavering dedication to fulfilling its debt obligations, showcased its robust financial management once again as it announced the redemption of a $500 million Eurobond borrowed in 2013.

The redemption of this Eurobond, which was part of a dual-tranche USD1 billion issuance, demonstrates Nigeria’s commitment to maintaining financial stability under former President Goodluck Jonathan.

Issued in July 2013, the Eurobond held a tenor of ten years and carried a coupon rate of 6.375% per annum, according to a statement released by the Debt Management Office (DMO). With this recent redemption, Nigeria has now successfully redeemed a total of $1.8 billion worth of securities in the International Capital Market (ICM) since 2013.

The repayment of the $500 million Eurobond joins the ranks of previous successful redemptions by Nigeria.

In July 2018, a similar Eurobond worth $500 million was redeemed, followed by another $500 million Eurobond in January 2021 while in June 2022, Nigeria successfully redeemed a $300 million Diaspora Bond.

This remarkable feat in the international market signifies Nigeria’s adeptness in managing its debt and executing well-planned financial operations. The consistent fulfillment of debt service obligations highlights the country’s commitment to maintaining a strong credit standing and preserving investor confidence.

Nigeria’s proactive approach to debt management has not only resulted in the successful redemption of its Eurobonds but has also contributed to its overall economic resilience. By diligently honoring its financial commitments, Nigeria strengthens its position as an attractive investment destination and builds trust among international investors.

The country’s achievement in debt management underscores its dedication to fostering sustainable economic growth. With each redemption, Nigeria paves the way for a brighter financial future, allowing for increased investment in critical sectors such as infrastructure, healthcare, and education.

Also, Nigeria’s consistent efforts to meet its debt obligations demonstrate responsible fiscal practices, providing a solid foundation for future economic development. By fulfilling its commitments, the country sets a commendable example for other nations grappling with debt management challenges.